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Kwality plans to invest Rs 300 crore on expansion

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Dairy firm Kwality Ltd is planning to invest about Rs 300 crore in the next fiscal to expand its milk procurement operations and launch more value-added products to its portfolio.

The national capital based company has six plants in Haryana, Uttar Pradesh and Rajasthan with processing capacity of 30 lakh litres a day.

Kwality Ltd posted a turnover of Rs 3,700 crore in 2012-13 and is looking at 20-25 per cent growth in the topline this year.

A few years back, Kwality Ltd started selling milk to retail consumers and is selling 3.5 lakh litres a day under 'Dairy Best' brand, out of which 2.25 lakh litre is in Delhi-NCR.

"We are procuring about 28 lakh litres of milk per day, of which 5 lakh litres is purchased directly through our 22 milk chilling centres. We want to strengthen our milkprocurement capacity," Kwality Ltd CMD Sanjay Dhingra told reporters here.

The company plans to increase the number of milk chilling centres from 22 to 90 over the next 2-3 years.

Kwality has also decided to expand product basked through launch of value-added dairy products like flavoured milk, yoghurt, cheese and UHT milk. It is currently selling ghee and skimmed milk powder (SMP).

Asked about investment on expansion, Kwality Director Sidhant Gupta said it could be about Rs 250-300 crore.

The launch of value-added products would boost the company's profit margins, he added.

On fund raising plans, Gupta said the company has taken shareholders approval to raise Rs 1,000 crore through various instruments including equity but nothing has been finalised.

Kwality is also into exports of SMP. It has also set up a subsidiary in UAE that is engaged in exports and imports of skimmed milk powder, ghee, butter and other dairy products.
 



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